One of the aspects of invoice factoring that distinguishes this form of commercial financing is the relative amount of interactive correspondence required. In other words, the client, or small business using factoring is in contact on a regular basis with the factor.
There are parts of the factoring transaction which require the factor and the client to be in communication with each other. To start, the small business needs to check with the factor to see if the account debtor aka customer is creditworthy enough to have their invoice financed.
Then working with the client, the factor needs to verify the invoice to make sure it is valid. This is preferably done with the client contacting the customer to alert them that their financial partner is doing the verification.
Because many companies operate in their own fashion and certain transactions between the client and the customer are unique, the factoring company needs to be kept apprised of each situation so all parties are aware of all the moving parts.
For these reasons it is important to work with a factoring partner that is easy to work with, flexible in terms of procedures and willing to keep the whole factoring process as low impact as possible. This should be an important consideration when seeking to factor your accounts receivables.